Future energy bills could give customers a nasty shock

Millions of households could be affected by higher bills Credit: Press Association

In twin reports, officials have issued new warnings about our future energy bills.

In a report this morning Ofgem says spare electricity capacity will fall by 10% in the next three years as power stations close. The rules of supply and demand mean this could push our bills up. There is also a risk that at times of peak demand - cold snaps - there would not be enough to go round. In these circumstances it is unlikely households would suffer - industry would be asked to stop using electricity.

Meanwhile, officials also say that energy firms are making more profit from each customer.

It's bleak news as household face a winter of high fuel prices - alongside other increasing costs for unavoidable basics like food and petrol.

Ofgem says the average margin for a typical, standard tariff dual fuel customer is approximately £50. This is £5 higher than their previous estimate - published on 26 September.

But there is worse news: Officials expect that profit margin to rise to around £70 over the next three months. This is because some bills are going up (SSE announced it will increase its gas and electricity prices by an average of 9%, effective on 15 October) and reduced wholesale costs.

Figures suggest energy profit margins are rising Credit: Press Association

This will cause uproar, re-igniting the big question... why aren't falling wholesale energy prices passed on to hard pressed customers much more quickly.